About the Fund

Do I pay tax on my benefits?

Yes.  A part of your lump sum benefits may be taxable.  And your pension payments are usually taxed in the same way as your salary or wage.

 

Do I get tax relief for my contributions?

Yes, subject to tax legislation.  Currently you can deduct the full amount of the contributions that you pay to the Fund during a tax year from your income before tax is levied.

 

Do I have any other option at termination of service?

 
  1. If you terminate your service or are discharged as a result of unsatisfactory service (not fraud or dishonesty) or dismissed as a result of decreasing or reorganisation of staff and have already completed 5 years of Pensionable Service, you have the option to choose a deferred pension.

 

Such a pension will be based on your pensionable Service until and with your Final Average Emoluments on the date of termination of service.

 

  1. Your deferred pension will become payable as from your Normal Retirement Date.  At your request, commencement of payments may, however, be accelerated with age 50 years as the earliest commencement date.

 

If acceleration occurs, your pension shall be reduced by 0,4% for each month or part of a month between the commencement of pension payments and your Normal Retirement Date.

 

  1. After pension payments have commenced, the deferred pension is subject to the same conditions that would apply if you were to retire on or after your Normal Retirement Date.

 

  1. If you exercise this option you may choose at any time before your Normal Retirement Date that the value of this pension be transferred to another pension fund or retirement annuity fund.

What happens if I am disabled and cannot work anymore?

What happens if, as a result of my disablement, I become wholly unable to follow my regular occupation or any other occupation which I can follow considering my training or experience?

 

A monthly pension equal to the pension calculated at your retirement on your Normal Retirement Date, reduced by 25% of the portion of it which has bearing on the number of months’ pensionable service calculated from your retirement until your Normal Retirement Date.

 

The following example shows a typical calculation of this disability benefit.  In the example we have assumed that a pension is granted to a member who has been prevented by disability from exercising his normal duties, 17 years (204 months) before his Normal Retirement Date, also that the member earned a basic salary of R36 000 per year at the time of disablement and that he had completed 12 years (144 months) of Pensionable Service.

 

Therefore the member receives a pension of –

 

 

144/540 x R36 000

Plus

R9 600,00

 

75% x 204/540 x R36 000

R10 200,00

 

Therefore the member receives a pension of –

 

 

 

= R19 800,00 per year

R1 650,00 per month

Does my pension increase in the course of time?

Yes. Any pension payable to you or your dependants, as well as deferred pensions, will increase from time to time as decided by the Trustees.

What benefits are payable if I die after having retired on pension?

If you are a pensioner and you die, your pension shall cease, provided that if the pension has been paid for a period of less than 60 months as from your date of retirement, payment of your pension shall continue until 60 monthly instalments have been paid.  In addition, if you are a pensioner who leaves an eligible spouse or qualifying children, the following shall also be payable on your death:

  • A lump sum equal to the highest of 25% of your Final Average Emoluments and 50% of your annual pension at the time of your death, will be paid to your dependants.
  • If you leave an Eligible Spouse with whom you were married or had entered into a customary union before your normal retirement date or at early retirement date and if you have notified the Fund of the existence of such union, he/she will receive a monthly pension for the rest of his/her life equal to two-thirds of the monthly pension you received at the time of your death or would have received if you had not taken part of it in a lump sum at retirement.

What benefits are payable if I die after my normal retirement date, but while I am still in service?

You are deemed to have retired on pension on the day before your death and the same benefits are payable as if you had died after having retired on pension. The only difference is that your dependants may apply to the Fund for a part, but not more than one-third of your total pension, to be paid to them in a lump sum.

What benefits are payable if I die before my Normal Retirement Date while I am still in the service?

If you are a Fixed Member a lump sum equal to the following is payable to your dependants:

 

  1. The greater of your Minimum Individual Reserve and the sum of amounts transferred from other funds (including the Old Provident Fund) to the Fund in exchange for additional Pensionable service as calculated by the Actuary, plus the greater of three times your Pensionable Emoluments, or twice your Accumulated Contributions other than those mentioned above.

 

  1. If you are a Member other than a Fixed Member who does not leave an Eligible Spouse or Qualifying Children, the greater of your Minimum Individual Reserve and a lump sum equal to your Pensionable Emoluments.

 

May I take a part of my pension in cash when I retire?

Yes.  Prior (before or within 14 days) to your retirement, you my apply to the Fund for a part, but not more than one-third of your total pension, to be paid to you in a lump sum at your retirement.

May I retire after my normal retirement date? If so, what will my benefit be?

Yes, Provided you get the approval of your employer, you may remain in service after your normal retirement date.

 

You will then receive a pension as from your deferred retirement date.  It will be equal to –

 

  1. the pension you would receive if you were to retire on your Normal Retirement Date, but taking into account your Final Average Emoluments and Pensionable Service when your service is terminated, if your own and your employer’s contributions for you are continued.

 

  1. The pension you would receive if you were to retire on your Normal Retirement Date, but increased by an amount as determined by the actuary, if you stay on in the service of the employer in a part-time or temporary capacity and your own and your employer’s contributions for you cease.

 

The deferred payment of your pension will be subject to taxation on the date of its accrual as may be determined by SARS from time to time.

 

The following example shows a typical calculation of this late retirement benefit.  In the example we have assumed that the member retires on 31 December, 2 years and 5 months (29 months) after the member’s Normal Retirement Date and that contributions continue.  At the member’s Normal Retirement Date the member’s Final Average Emoluments were R60 000,00.and the member had completed 32 years and 5 months (389 months) of Pensionable Service.

 

Final Average Emoluments

R65 000

Pensionable Service

32 years and 5 months

Therefore the member receives a pension of –

389/540 x R65 000

 

= R46 824,07 per year

R3 902,01 per month

This pension can be increased as determined by the actuary

 

 

May I retire before my normal retirement date? If so, what will my benefit be?

Yes, you may retire before your normal retirement date.  If, however, you retire before the age of 60 years, your employer must grant approval.  For purposes of illustration we refer to Categories A,B and C in the example below.  These categories do not appear in the registered Rules.

 

Category A

 

If you retire early between the age of 60 and 63 years, your pension will be calculated as in the paragraph regarding your pension at your Normal Retirement Date, but taking into account your Final Average Emoluments and Pensionable Service when you retire.

 

Category B

 

If you were a member of the Fund before 1 January 1960, have completed at least 30 years’ Pensionable Service, have reached the age of 50 years and you retire more than 3 years before your Normal Retirement Age (63 years), your pension will be calculated as described in the paragraph regarding your pension at your normal retirement date, but taking into account your Final Average Emoluments and Pensionable Service when you retire.

 

Category C

If you have completed at least 10 years’ Pensionable Service, have already reached the age of 50 years, but not yet 60 years, and you retire or are discharged from the employer’s service, your pension will be equal to a part 1/(m + 540) of your Final Average Emoluments for each month of Pensionable Service, where M represents the number of full months between your actual retirement age and the age of 60 years.

 

The following example shows a typical calculation of this early retirement benefit referred to in Category A.  In the example we have assumed that the member retires 1 year (12 months) before his Normal Retirement Date.  The member’s Final Average Emoluments at the time is R57 000 and the member has completed 29 years (348 months) of Pensionable Service.

 

Final Average Emoluments

R57 000

Pensionable Service

29 years

Therefore the member receives a pension of –

348/540 x R57 000

 

= R36 733,33 per year

R3 061,11 per month

 

The following example shows a typical calculation of this early retirement benefit referred to in category B.  In the example we have assumed that the member retires 4 years (48 months) before his Normal Retirement Date.  The member’s Final Average emoluments at the time is R52 000 and the member has completed 26 years (312 months) of Pensionable Service.

 

Final Average Emoluments

R52 000

Pensionable Service

26 years

Therefore the member receives a pension of –

312/540 x R52 000

 

= R30 044,44 per year

R2 503,70 per month

 

 

The following example shows a typical calculation of this early retirement benefit referred to in Category C.  In the example we have assumed that the member retires earlier at age 58 years, that is 2 years (24 months) before age 60 years.  The member’s Final Average Emoluments at the time is R45 000 and the member has completed 25 years (300 months) of Pensionable Service.

 

Final Average Emoluments

R45 000

Pensionable Service

25 years

Therefore the member receives a pension of –

300/24 + 540 x 45 000

 

= R23 936,17 per year

R1 994,68 per month

 

What happens if I am retired due to ill-health?


If your service is terminated before your normal retirement date owing to ill-health and you are not entitled to the disability benefits mentioned in this booklet, your employer and the Trustees, at their discretion may decide that a pension be paid to you.

 

The pension will be calculated as in the previous paragraph, but taking into account your Final Average Emoluments and Pensionable Service when your service is terminated.

 

The following example shows a typical calculation of this ill-health retirement benefit.  In the example we have assumed that the member’s service is terminated 2 years (24 months) before his normal retirement date owing to ill-health.  The member’s Final Average Emoluments at the time is R54 000 and the member has completed 28 years (336 months) of Pensionable Service.

 

Final Average Emoluments

R54 000

Pensionable Service

28 years

Therefore the member receives a pension of –

336/540 x R54 000

 

= R33 600,00 per year

R2 800,00 per month

 

What happens if I am retired due to ill-health?

 

If your service is terminated before your normal retirement date owing to ill-health and you are not entitled to the disability benefits mentioned in this booklet, your employer and the Trustees, at their discretion may decide that a pension be paid to you.

 

The pension will be calculated as in the previous paragraph, but taking into account your Final Average Emoluments and Pensionable Service when your service is terminated.

 

The following example shows a typical calculation of this ill-health retirement benefit.  In the example we have assumed that the member’s service is terminated 2 years (24 months) before his normal retirement date owing to ill-health.  The member’s Final Average Emoluments at the time is R54 000 and the member has completed 28 years (336 months) of Pensionable Service.

 

Final Average Emoluments

R54 000

Pensionable Service

28 years

Therefore the member receives a pension of –

336/540 x R54 000

 

= R33 600,00 per year

    R2 800,00 per month

 

What will my benefit be if I retire on my normal retirement date?


You will receive a monthly pension equal to the following fraction of your Final Average Emoluments for each month of Pensionable Service:

1/480 for an Executive General Manager
1/540 for another Member

Subject to a maximum amount equal to 100% of your pensionable salary as at the date of your retirement.

The following example shows a typical calculation of this retirement benefit. In the example we have assumed that, on the member's normal retirement date, the member's Final Average Remuneration is R60 000 and the member has completed 30 years (360 months) of Pensionable Service.

Final Average Emoluments                R60 000   
Pensionable Service 30 years
Therefore the member receives a pension of –
360/540 x R60 000
= R40 000,00 per year
R3 333,33 per month




What is my normal retirement date?


In the case of a General Management Member - the first day of the month next following the attainment of the age of 60 years; and

the first day of the month next following the attainment of the age of 63 years for other Members.

How much does my employer contribute for me?

Your employer contributes the balance of the cost necessary to pay for the benefits that you will be entitled to.

How much do I have to contribute to the Fund?

You must contribute 6% of your basic salary or wages to the Fund. You may elect to contribute 7,5%. The contributions in excess of 6% will be utilised to enhance your benefits. Your employer will automatically deduct your contributions from your salary or wages and pay it to the Fund immediately.

With the approval of the Trustees you may make Additional Voluntary Contributions for the purpose of accumulating additional benefits. These contributions may not necessarily be tax effective.

A record shall be maintained in respect of each Member's Additional Contributions, to which, after deduction of any administration expenses, shall be added such interest as the Trustees, acting on the advice of the Actuary, determine.

These contributions will not purchase additional service for you but will accumulate with interest to provide additional benefits.